Mar 18, 2016 3 min read

Washington County officials watched a meeting of the Federal Reserve closely Wednesday because a rise in interest rates could have had a negative effect on the money the county hoped to save by refinancing two 2007 bond issues.

They may have been relieved when the Fed chose not to change interest rates because the status quo meant a savings of $925,011 in debt service on an $8.29 million issue.

Proceeds from the county’s latest moves in the bond market, approved Thursday by the county commissioners, resulted in advance refunding of portions of the Series A of 2007 bonds and all of the Series B of 2007 bonds for 11.4 percent in present value savings. Both bonds could be called in 2017, and the county had but one chance to refinance before next year. In 2007, the county needed about $6 million to pay for improvements in the 911 call center and public safety department not covered by a $9.3 million state grant; repair of the courthouse roof; development of the north side of the county airport and the building of three new hangars; replacement of the Hanlin Station railroad bridge on the Panhandle Trail; and improvements at both Mingo and Cross Creek county parks. The Washington County Authority closed out its loan pool bond fund, begun in 1999, in 2007.

“It’s a very compelling refunding here at 11.4 percent,” Nick Falgione, managing director of PNC Capital Markets, told the commissioners. “The results are very strong for the county.”

PNC Capital Markets is underwriting the bonds.

According to a news release earlier this month, Moody’s Investors Service assigned the Aa2 rating to Washington County’s $8.3 million general obligation Series 2016 bonds.

The county’s bond rating remain unchanged from 2013, the last time the county refinanced a bond issue.

Vanessa Youngs, lead analyst of Regional Public Finance Group Northeast of Moody’s Investors Service Inc., wrote, “Concurrently, we have affirmed the Aa2 on the county’s $45.1 million in outstanding general obligation debt. The Aa2 incorporates the county’s large tax base with average wealth levels, strong reserves and minimal debt and pension obligations.”

Falgione called Washington County’s Aa2 rating “‘one of the highest ratings in Western Pennsylvania for a county bond rating,” reflecting stewardship, the financial wherewithal of the county and the governance here.”

Factors that could lead to a downgrade, according to Moody’s, include “significant support of the county’s nursing home that adversely affect the financial position and material declines in reserve or liquidity levels.”

Earlier this month, the commissioners, in an attempt to stop the flow of red ink, began advertising for a consultant to perform a financial analysis of the 288-bed county-owned health center in Arden aimed at minimizing costs and maximizing both Medicare and Medicaid reimbursements for services.

To promote the health center for those seeking either short-term rehabilitation or long-term care, the commissioners Thursday entered into an agreement with National CineMedia to advertise the facility on all 14 screens at Regal Crown Center April 16 through Oct. 20 at a cost of $3,351.